Pembina Pipeline (PBA) Q4 2025 earnings call transcript

Thank you, Jade. Good morning, everyone. Welcome to PEMBA's conference call in the webcast to review highlights from the fourth quarter of 2025. On the call today, we have Scott Burrows, President and CEO and Cameron Goldade, Chief Financial Officer, along with other members of PEMBA's leadership team. I would like to remind you that some of the comments made today may be forward-looking in nature and are based on PEMBA's current expectations, estimates, judgments and projections.

And I would like to welcome Scott to the next slide. Thank you.

Thanks, Dan. Yesterday, we reported our fourth quarter results, which included earnings of $489 million, adjusted EBITDA of approximately $1.075 billion, and adjusted cash flow from operating activities of $731 million or $1.26 per share. For the full year, we delivered earnings of $1.694 billion and adjusted EBITDA of $4.289 billion. We achieved record annual volumes across our pipelines and facilities divisions, which represented a 3% increase over 2024.

Full year results also included adjusted cash flow from operating activities of $2.854 billion or $4.91 per share. Each year, I'm always proud to look back and reflect on our team's many accomplishments. 2025 was no exception. In addition to solid financial and operating results, we also advanced strategic projects and strengthened our long-term competitive positioning. I'm particularly proud that PEMBA continues to deliver on its promises, including providing safe and reliable operations, meeting its financial targets, constructing major projects on time and on budget, and continuing to execute its strategy with an improvement risk profile.

Several notable achievements in 2025 and early 2026 stand out. Safety is a core value in the foundation of PEMBA's operations and culture. While the journey never ends, I am pleased with our strong safety and environmental performance that exceeded our internal 2025 targets, highlighted by improved performance across key indicators relative to our three-year averages. We advanced construction of several growth projects, including the RFS4 Propane Plus fractionator at the Redwater Complex, the Wapiti Natural Gas Processing Expansion, and the K3 Co-Generation Facility.

All three projects are trending on time and on or under budget. The Wapiti expansion and K3 Co-Gen are currently in the commissioning phase and are expected to be in service in the next few weeks, and we look forward to the RFS4 expansion coming online during the second quarter. Additionally, under previously announced funding agreements, PGI in collaboration with certain producer customers expects to place approximately $725 million of new infrastructure into service throughout 2026, all supported by long-term taker pay agreements.

We supported our long-term resilience through extensive re-contracting across the business. These contracting successes support continued utilization of our assets, help ensure our stable cash flow stream, and create the foundation for future opportunities. In 2025, we renewed existing contracts and executed incremental new contracts totaling over 200,000 barrels per day of conventional pipeline transportation capacity. This includes successfully re-contracting substantially all available for renewal on the peace pipeline system under contracts expiring in 2025 and 2026.

We look forward to providing further contracting updates throughout 2026. As part of the toll review at Alliance Pipeline, we significantly extended Alliance's long-term contractual profile as shippers elected a new 10-year toll option on approximately 96% of available capacity. And we contracted the remaining capacity available on the 100,000 barrels per day nipacy pipeline, which is reactivated in 2023 to serve the growing clear water heavy oil play. Having fully contracted nipacy, we are now focused on opportunities to increase egress capacity to respond to strong customer demand for incremental services.

In response to growing demand for condensate and NGL transportation, we progressed development of conventional pipeline expansions to reliably and cost effectively meet rising transportation demands from growing production in the western Canadian sedimentary basin.

In late 2025, Kevin announced that it is proceeding with its Fox Creek to the Mayo expansion of the peace pipeline system, which will add approximately 70,000 barrels per day of market delivery capacity to the peace pipeline system. And yesterday, we announced two additional expansions of our Northeast BC pipelines, the burst to Taylor expansion and the Taylor to Gordon Dale expansion.

In total, these three expansions represent $625 million of investment to ensure feminist continued ability to service growing volumes in Northeast British Columbia and Alberta.

We took steps to significantly enhance our propane export capabilities through a new 30,000 barrel per day LPG export agreement with all to gas at its west coast terminals and the sanctioning of the Prince Rupert terminal optimization. Through these two initiatives, feminine shared access to 50,000 barrels per day of highly competitive propane export capacity premium price markets, including Asia for Pemana and our customers propane. On the cedar LNG project, we advanced construction of a floating LNG vessel to over 35% complete and significantly progress the onshore construction activities.

Further, Pemana met its commitment to investors by completing the remarketing of our 1.5 million tons of annual cedar LNG capacity by signing long term agreements with Petronos, a global LNG industry leader, and a event of one of the largest liquid rich natural gas producers in Canada. In addition to increasing Pemana's expected financial contribution from the project, these agreements further validate the cedar LNG project and highlight the strong demand for global export capacity, given the clear advantages of Canadian West Coast LNG, including competitively priced feedstock and advantage shipping distance to Asia markets.

Finally, Pemana and its partner, Connecticut, made significant progress in the development of the Greenlight Electricity Center, securing the required power grid allocation for the proposed third party innovation center, which was subsequently assigned to a potential customer green light and completed a land sale agreement with the customer. We also ensured the availability and delivery timing of two turbines to support the approximately 700 or 900 megawatt first phase of green light.

Greenlight represents an extension of Pemana's existing value chain and an opportunity to enhance growth by investing in long term contracted infrastructure with an investment grade counterparty, while diversifying its customer base would create increment demand for natural gas and associated liquids production within Western Canada. Pemana and Connecticut continue to progress various work streams, including finalizing a commercial agreement with the customer engineering procurement and regulatory activities and expect to make a final investment decision in the first half of 2026.

It was a busy and productive year for the Pemana team, and I look forward to building upon our momentum from 2025 as we strive for even greater success in 2026.

We are planning to hold a webcast and conference call on April 7th, where Pemana's officer team will provide a general business update and long term outlook. Additional details will be communicated in the coming weeks. I want to turn things over to Cam to discuss in more detail the financial highlights for the fourth quarter and full year.

Thanks, Scott. As Scott noticed, Pemana reported fourth quarter adjusted EBITDA of $1.075 billion. This was a 179 million or 14% decrease over the same period, the same period in the prior year, which primarily reflects a $118 million lower contribution from marketing and adventures. The impact of a new toll structure and revenue sharing mechanism on the Alliance pipeline and a $37 million period specific capital recovery that impact 2024 with no similar impact in 2025.

These factors were partially offset by volume growth and solid performance across the pipelines and facilities divisions. Looking at quarter over quarter results by division, the major factors impacting the quarter and pipelines included higher volumes on the piece pipeline system. Lower operating expense on the quotient pipeline. Lower revenue on the Canadian portion of the Alliance pipeline as a result of reduced long term from tolls and impacts from the new revenue sharing mechanism under previously announced settlement offset by higher demand on seasonal contracts.

Lower revenue on certain pipeline assets due to period specific impacts of capital recoveries, recognizing the fourth quarter of 2024. And lower interruptable volumes on the quotient pipeline due to narrower condensate price differentials.

In facilities, factors impacting the fourth quarter included lower revenue related to period specific impacts of capital recoveries, recognizing the fourth quarter of 2024 on certain PGI assets and higher operating expenses. As well as higher contribution for PGI assets, primarily due to higher volumes and the impact of the acquisition of a 50% working interest in white caps k-bop complex during the fourth quarter of 2024.

In marketing and new ventures, fourth quarter results reflected the net impact of narrower NGL frack spreads, partially offset by realized gains on NGL based derivatives and lower realized gains on crude oil based derivatives to do lower volumes and narrower price breaks.

Finally, in the corporate segment, fourth quarter results were lower than prior period due to higher long term incentive costs, partially offset by lower non compensation related expenses.

Earnings in the fourth quarter were $489 million. This represents a 15% decrease over the same period in the prior year. In addition to the factors impacting adjusted divita, the decrease in earnings in the fourth quarter was primarily due to the net impact of higher depreciation and advertising expense and pipelines. Lower other expenses recognized in the share of profit from PGI as 2024 included costs related to asset disposals. Higher share of profit from green light due to a gain on sale of land to a third party potential customer and various unrealized gains and losses on derivatives.

Again, recognized by Pemino on a sale of land to a third party potential customer green light combined with lower net finance costs and lower acquisition and integration costs offset by higher restructuring costs. And finally, lower income tax expense.

Total volumes in the pipelines and facilities divisions were 3.7 million barrels of oil equivalent per day in the fourth quarter. This represents an increase of 1% over the same period in the prior year. Higher fourth quarter pipeline volumes were driven primarily by higher interruptible and contracted volumes on the piece pipeline system. An increase in volumes on eggs as the fourth quarter in 2024 was impacted by third party outages.

An increase in contracted volumes on the nipacy pipeline. Lower interruptible volumes on the quotient pipeline due to narrower condensate price differentials. And the sale of the north segment of the western pipeline in the third quarter of 2025.

Higher fourth quarter facilities volumes were driven primarily by the acquisition of white caps k-bob complex in the fourth quarter of 2024. Higher volumes at the Dawson assets due to higher natural gas prices. Higher volumes at the DuVernay complex and a decrease in oxidative volumes due to lower ethane extraction. The fourth quarter contributed to solid, full-year results that included earnings of $1.694 billion, adjusted EVDA of $4.289 billion, cash flow from operating activities of $3.301 billion or $5.68 per share, and adjusted cash flow from operating activities of $2.854 billion or $4.91 per share. During the fourth quarter, Pemana announced the 2026 adjusted EVDA guidance range of 4.125 to 4.425 billion dollars.

The midpoint of the 2026 guidance range represents 2023 to 2026, fee-based adjusted EVDA per share, compound annual growth of approximately 5%, positioning Pemana to deliver on the target we originally provided at our 2024 investor date.

Based on Pemana's existing strong financial position, the 2026 year end proportionally consolidated debt to adjusted EVDA ratio is expected to be approximately 3.7 to 4.0 times, excluding debt related to the construction of the CDR LNG facility, which is expected to enter service in late 2028. This ratio would be approximately 3.4 to 3.7 times. With 2026 serving as the peak investment year for CDR LNG, 2026 is also expected to represent the peak year for Pemana's proportionally consolidated debt to adjusted EVDA ratio.

With incremental cash flow from projects entering service and a significant ramp down CDR LNG spending points 2026, Pemana's leverage is expected to return to the lower end of its target range of 3.5 to 4.25 times. I'll now turn things back to Scott.

Thanks, Cam. Doing what we said we would do is core to Pemana's leadership team, and I believe our 2025 accomplishments and our longer track record as a company speak to that. We continue to focus on providing safe, reliable, responsible and cost effective energy infrastructure solutions. I believe we are uniquely positioned to capture incremental new volumes in the growing Western Canadian sedimentary basin and connect our customers to high value global markets, while unlocking new opportunities beyond our strong legacy business.

Our entire organization is focused on ensuring the long-term resilience of our business and providing investors with visibility to attractive growth throughout the end of the decade and beyond. Thank you for joining us this morning. Please go ahead and open up the line for questions.

Good morning, Erin. It's Jared. Thanks for the question. And I think it's a really good one. So, you know, like we said in our press release, we've got three projects on the go on the pipeline, conventional pipeline, one side our Fox to the mail, which we talked about there a few quarters ago are our birch to Taylor, and then our Taylor to Gordon Dale kind of like, we'll call it phase one.

All of this capital 100% is being driven by, you know, really Canada unlocking our egress constraints. We have our oil constraints being alleviated, which is driving more demand for condensate. You know, our condensate import pipelines are fairly tapped hours and third party. So that's going to drive a lot of condensate domestic growth. And then obviously, you know, with that condensate comes natural gas and that egress constraint is also being lifted with LNG Canada being ramped up, cedar coming online, other projects, et cetera. So that's really driving the need for condensate and NGOs. And I know you know that, but I think it's important to ground ourselves that a lot of that growth is coming from.

Obviously, the Montney, but specifically up in that neighborhood of I'll call it north of Taylor, BC up into that, you know, north of Fort St. John Fort Nelson geographic area. A lot of it's coming from there. That really drives to the birch to Taylor project. If you think about it that way. So first off, I want to say that that project, the collaboration and the consolidation of industry, the indigenous communities and our partners. The BC government and the BC regulator, that was a tremendous outcome for us. Getting all of our hurdles in place and behind us collectively.

That project really is allowing us number one. It's going to grow our condensate and natural gas liquids, specifically C3 plus capacity. It's really to meet their needs, the growth demand that I talked about for all those other reasons. I think also Aaron, sanctioning that project now and bringing that online, you know, kind of the end of 27 to 28. It really, it shows the, you know, we've been really good at project execution. We pride ourselves on our safety record. We pride ourselves on working with local communities and subcontractors, et cetera. And I think really getting focused on making this project a cost focus and a safety focus project versus a schedule driven project. Because we all know our customers can drill significantly faster than we can build long linear assets.

So that's kind of, you know, birch to Taylor. Now get into actually your question. So like you said, February 10th, we did receive our federal permit for Taylor to Gordon Dale. And I really think about Taylor to Gordon Dale as growth in the Montney in two other specific regions geographically. I'm going to call it the Dawson Creek area. So, you know, south, south, east of Taylor, we're seeing a lot of growth in the Montney in that neighborhood.

And you're seeing, you know, it's the condensate in the C three plus once again. And then on the Alberta side of the border, you're seeing a lot of growth in the Montney in the what some refer to as the Peace River arch in around that Gordon Dale and up to the, to the western side of the Alberta border.

Ultimately, you know that getting that permit was also a tremendous amount of work. We did have some, you know, I would say objectors commercial objectors, but I think our team persevered and got that. We will need that project full stop. One day of the condensate and it's in the near future due to all the exact same demand. The condensate is growing in that area. The C three plus is growing in that area. But what I will say is one of the things about Pemma is not only our ability to build projects on time in our budget. We also are flexibility of our infrastructure and our people. Our people really took a step back and work collaboratively with operations or engineering hydraulic teams, and they came up with a little bit more of a capital light solution.

All of this capital we required for the full build out, but a capital light solution, which really is a prudent deployment of capital, which cam gives me a high five four all the time. And it still allows us to meet our customer needs and meet their egress demand almost like as they grow. It's almost on demand. We can go out and build this. So hopefully that provides you a little bit of color. We don't see this due to overall certain customers talking about production profiles and condensates growing natural gas is going to come with it. Pemma is ability to grow with our customers is I think better than anyone else in the basin.

Yeah, and thanks, Chris Sherman. You know, I think we've all seen significant volatility to start the year. Obviously, we're only only 60 days in and you just referenced it. We're happy to see the price outlook for the remainder of the year, improve, especially at sort of over the last week. And I think all in all things are actually looking positive for us for the remainder of the year. I'd highlight the first 45 days of the year.

We definitely saw some some headwinds on us frack spread, primarily as a result of us weather, which drove up Chicago gas prices. But, but given those us frack spread headwinds to start the year combined with the improved outlook for the remainder of the year. Right now we're still looking to be slightly ahead of the midpoint on our marketing guidance for the full year, you know, I'd highlight there's still a lot of year left to go. I'd also highlight that given those those headwinds earlier in the year, we can probably expect a little bit of a reshaping of the profile through the, through the full year. But we're optimistic and sort of remain on plan for the full year.

Aaron, I'll just maybe it's it's shared here just on the flip side of that. Obviously, what's really high Chicago gas prices that puts pressure on on our frack spread business. But it also, you know, the A code of Chicago spread drives fee based business to offset some of that, some of that noise. And then obviously, you know, I think I might talk to it, but we're seeing some fairly strong fluctuations in in FX, you know, just. When we lost, you know, 60 days, et cetera.

Hi, Jeremy. It's Jared. So, first off, really pleased to extend our partnership with tourmaline. They're obviously one of our largest customers and one of the largest producers in West from Canada. You know, and it's always kind of, it warms my heart to see that the cut bank complex, which is permanent as original acquisition and the gas processing back in 2009 that we're continuing to see.

You know, flat production, you know, growing production in and around that area. So. You know, with respect to tolls, we won't get into the details on that. But obviously, I'll break it down into a couple piping for act tolls. You'll see those consistent with the rest of our business. It wouldn't be specific to this customer in this area. And then on the PGI side of our business.

You know, the gas economics and the overall netbacks in and around this area, they are strong because of the liquid's production that comes out of it that supports the overall netback for our customers. So in this area, you don't have to see a lot of toll erosion in order to meet the customer's needs on the processing side.

You know, with that said, you know, although we're extremely excited to extend this partnership. You recall in two, three, we recorded a small write down with respect to one of our processing contracts that didn't get extended in a different geographical area of the deep basin. You know, so, but with that said, since since that date of that press release and talking about that expiry, our teams who are focused on, you know, fill in our assets every day have essentially recovered 60% of that. That value and and will continue to backfill that portion of the business.

Also, Jeremy, that that has been fully baked into our, you know, the, the re contracting and, you know, the, the Q three announcement that has fully been baked into our 2026 guidance and our overall long range plan.

Yeah, Jeremy, it's got here. I would just caution that it, like Chris said, it's the increase in commodity price has, has happened pretty, pretty rapidly here. And let's break that down. I mean, it's really been on the crude oil price. I mean, we still have seen a ton of volatility in a co, an a co in station to today are, are kind of where we started the year, if not slightly below propane's kind of remained flattish. So it's very commodity specific and the crude oil run up here has just happened very shortly. So I would say that this short term run up. I don't know that it's been sustained enough to say that producers have changed their activity from the start of the year.

You know, there's also been a fair bit of M&A to end last year. And, and I think as people work through closing those, those transactions, you know, hopefully over the next couple of weeks or months here, we'll see kind of revised drilling plans. You know, I, this comment is not specific to the recent M&A because, you know, obviously you can't talk about that. But historically, what I would say over the last two years, as we've seen some of the consolidation happen, we've actually seen an acceleration of volumes.

You know, most people don't buy, you know, another company to keep production flat or decline at typically we've seen growth. So we're excited to see what could come out as some of the consolidation, but can't speak specifically to that just yet.

Maybe just further to that, you know, when I break it down into the different geological formations. I'll start with like in that old school, Drayton Valley area. We're also seeing, you know, these prices, even at $60. We're seeing a tremendous amount of drilling and, you know, even as you talk about the, you know, the self-dubernet, et cetera, our system out in that area, obviously is seeing strong volumes.

If you move up into kind of that piece of our arch area, again, that I talked about, you are seeing a lot of companies talk about Charlie Lake oil. That's continuing to grow and Pamela has, you know, oil assets in the area to capture those volumes into the Edmonton market. If you go kind of north back up, you know, our Clearwater area, the Nipacy pipeline, you know, based on all of the connections we have today and the pumps we have in place.

You're seeing the upstream customers really talk about the recovery factors increasing, the drilling results, how economic they are. You know, you can continue to see Nipacy capture more and more of those volumes. And we're working on, I talked about the optimization. We did a tailored to Bordindale. Our teams are driving some really cool cheap expansions on the Clearwater, for the Clearwater customers on the Nipacy pipeline. And then when you think about the Montney, I think I touched on it, but, you know, our customers, they have so much land across so many geographical areas and permanent system obviously expands a significant geographical area. Our customers, if they're, you know, if they're having some challenges or they're maxed out on capacity in one area or constrained by natural gas, egress in an area, they can always redeploy capital.

Like I said, the oil sands needs condensate. The import pipelines are fairly full. It has to come from somewhere in our customers, the Alberta innovation or the Western Canadian energy innovation. It will unlock this condensate. And I think our system is pretty prime to capture it. So things are in good shape.

Thanks for the question. It's Chris. So obviously we're, you know, very pleased to see the project moving ahead in line with really our expectations.

You know, as we've touched on down before in your referencing, excuse me, the minor delay in the project has allowed us to reevaluate, you know, how best to serve the customer here with the most efficient capital efficient infrastructure options are to serve the customers needs. We will be out this year clarifying that and that work continues. We keep pointed down that path. So we look forward to making FID on these additional infrastructure this year, but we can't provide any more detail today on the call. Obviously, Dow value partner to us, congratulate them on on the progress they made on the project and we look forward to getting more details out to the market and progressing.

You bet. So, so Chris again, you know, obviously made significant progress since forming that JV reference that right in 2025. We secured the 907 megawatts of a allocation, which we subsequently assigned to our potential customer entered into agreements on turbines, locked those up, got where we needed to be in the queue for those. Close our land sale to set our customer up for success, both on the base project as well as as well as a bunch of growth. So as we're looking forward now, we're targeting FID and Q2. We're positive on, you know, on that timeline and really focused on three three work streams between now and then number one commercial.

So we continue to work through negotiations with our potential customer. We're in the middle of those negotiations. So, you know, obviously can limited details on that at this point, but I'd say they're going as as expected. Timelines are going as expected and we have confidence. We're going to reach on the extreme like long term contract to underpin this commercially.

Secondly, regulatory, we're making great progress. We don't view this as a high risk work stream for the project and we're not part of the discussions between, you know, the customer and the government, but we understand those are those are going really well. There's more information that's come out on the levy and the rest of it, which is, I think, positive and in line with with expectations.

And then finally, third work stream engineering. So we're working through our feed. We've got top tier global engineering partners in that that's progressing well all pointed towards Q to FID targets. So Scott spoke about it and his opening remarks, but I think things are going as as we'd hoped on this. We think the projects remains a tremendous on strategy extension of our business and we're excited to get it. To get it across the rope line here in YouTube.

Good morning, Jared here. So we continue to see strong demand in the Alberta industrial heartland area for for natural gas to, you know, progress other industries. There's still a few days left in the quarter and you should expect to see an announcement fairly shortly.

No, it was all essentially all of it was was renewal. Same volumes.

Hey, Robert, it's Cam here. Yeah, really? I mean, honestly, a couple factors. One, you know, we recognize there's a window here for, for market participants that works better or worse. And so as we get into March, you know, we start to, we start to interfere with, you know, potentially other commitments.

But I think probably more presently, you know, things are moving fast, obviously, with, with certain of our key growth opportunities. And so our objective when we when we release a long term guidance is to give you and our investors as much granularity and as much concreteness to that build up as possible. And so, you know, I think our objective this time around, you know, whereas in 2024 we generally gave, you know, a growth outlook and some pieces which would support that. We're really trying to provide the market with a really robust build up to that. And so we'd love to be in a position to have obviously the most certain be possible around that build up and that's the biggest factor that aligns with the sort of post to one timing.

Rob Jerry here. Yeah, you know what PGI is going to continue to, you know, grow their business. You know, we obviously step one with respect to that business is filling white space. So, you know, some of the announcements mean we made with the infrastructure build up we're doing with with white cap in and around the Lator area. That's really, you know, all designed to to one is fill existing white space at some plants in and around that area. But also then to grow the liquids volumes on to Peminis piece pipeline system and the NGLs into into Fort Saskatchewan, Peminis, red water facilities.

You know, after that we're looking at continuing to build out organically. There are opportunities out there that we're evaluating. So probably more to come on that. And then lastly, you know, there's there's always the inorganic stuff. I think PGI out of any one of the gas processing businesses in Western Canada has been ahead of its time with respect to creativity.

And, you know, being on the board with KKR, we continue to encourage and press the team on to come back to us with more and more of those creative ideas. So that's kind of how we see the business there.

Yeah. Thanks for the question and I'll ignore the comment. Maybe next quarter we can talk about it. But yeah, you know, I think we did try to highlight it, you know, obviously a very, very successful 2025. You know, we feel like we've started off the year strong, as Jared mentioned, both with the terminally and re contracting, but as well as the success on alliance and nipacy.

And so in terms of specifically to 2026 again, we're not going to get into specific contract profiles. That's obviously a competitive dynamic. But what I will say is that we would expect to have a little more granularity on this on our April 7th update and talk a little bit about more where we're at year to date and what our expectations are. So, you know, good question, but I don't want to front run our April 7th update.

Great question. I also put your comment behind me while I answer your question. Yeah, so the the the short haul or the space one pardon me, the short haul is aligned space one. That's fully baked into our 2026 capital guidance right now. And with respect to FID timing, you obviously will be shortly in the future. You'll probably hear a little bit more on April 7 with respect to that. But it's really we have some flexibility now to go and be very focused on project execution on this phase one. And phase two will be coming really as as we start to fill up these next phases and and like I said earlier to my question to Aaron.

Our answer to Aaron was, you know, really it's almost like an on demand ability for us to grow with our customers. And then also we will be, you know, we have ordered our pipe and we have ordered, you know, obviously some of the above ground equipment like pumps and all that stuff. So that's all part of the process and for it for the full build out. So we will just deploy that capital as as required.

It's Chris. I'll take the first part on green light and then maybe turn it over to Cam to talk about guidance.

You know, as I mentioned, we're in the middle of negotiations. So unfortunately, you can can provide, you know, limited guidance. But, but what I can say is, you know, it's a long term contract. A long term contract with, you know, midstream like attributes. It looks a lot like our core business. And we're really pleased with the fact that we've been able to do that. You know, I think when it comes down to it, if you think about it on a build multiple basis, you know, it's going to look a lot like other permanent greenfield projects that we've been doing under long term contracts.

With the facility benefits down the road as we think about integrating gas supply and the other components into it. Looking to drive that down over time, consistent with how we've pursued other projects in our core business.

I just add a little bit of a color, you know, obviously we have a partner, a partner on the file. And therefore, you know, a private equity partner and therefore would need to project finance the project, which, you know, when you stack those two things up, you can assume that there would be a low risk. Eat it up profile in order to support a project finance.

And pretty good.

I'll just pick up on one thing that Chris said around the structure. And that is, you know, want to reiterate and make sure everyone understands that, you know, well, the project in its own right is a really interesting project. One of the one of the things that really sells it for us or really gets it's excited about it is the integration with the rest of our business. And so you've heard us talk about it, and I think we'll be in a position to talk more about it, you know, or more more more succinctly about it as we get to our April 7 presentation. But, you know, in summary, I mean, there's a ton of integration potential around the Alberta industrial heartland.

And I think the so what of that is it really starts to take a greenfield like return profile and really turn it into a brownfield like return profile, ultimately, for pivoted. And so that's what gets us really excited about that. And you couple that with a low risk contract structure. But it grows out. Look, obviously, as we said before, once once once these types of opportunities get built and certainly has has been the precedent on the southern side of the border, they tend to cluster. And I think as we, you know, walked our board through yesterday, we have a ton of advantage in terms of our Alberta industrial heartland position, everything that comes along with that.

And so getting the first one in the ground gives us a huge advantage in terms of building a business out of this.

So, so as Dara touched on, and he can provide a little bit more color. You know, we are going through some some D bottlenecks, which can add as you as you pointed out some very reasonable, both from a return and from a time to market. I think the bigger picture here longer term is we have an opportunity to expand portions of that pipe to add significant capacity. And so we're right now doing the engineering and continuing to advance the engineering on what that might look like and are having commercial discussion. So we kind of have a two-faced approach. We have the early D bottlenecks and then we have a larger potential.

Winning of the pipe. Or anything you guys want to add.

I'll just add that when we say right now that so commercially we're contractually full for the base asset. But we do have a third party that's going to be making connection in the next few months that will get us to physically being full on a physical basis. And then the D bottlenecks projects I talked about will give us about 20 to 30% incremental torque on that asset. And that truly is through drag reducing agent that we use every day on our quotient pipeline. We're very familiar with how that works and we'll try work work installing that. And then just some minor horsepower upgrades to get that capacity.

Camera. It's Cam. I just want to. Yeah, I just want to chime in one more piece here and I think it's worth noting that the history on this asset is something that we're quite proud of. And I think speaks to our business and our commercial opportunity overall, which is, you know, obviously this asset was in a different form of service with a different customer pre 2021. And it was underpinned by a long term contract at this point.

We obviously took out a service because we thought that was the right thing to do in light of the options. And as we sit here today, you know, the EBITDA that this pipe will generate in 2026 is materially above what it did in the former service under the foundational contracts like to the tune of 50%. So, and we see, you know, significant growth opportunity on top of that. So we're really pleased with our approach that. And I think it speaks to both the diversity and the optionality in our business.

Yeah, great. Great question, Maurice. It's Cam here. So I'd say I'd go back to some things we said in the past, which is, you know, our track record and our intention has been that, you know, we obviously seek to, to fund capital with cash flow dividends. And, you know, at our level that we're at today, you know, we can think about that as roughly, you know, plus or minus about a billion and a half dollars a year in any given year for round numbers. And I would say, obviously, this year we talked about how it's the peak year for cedar. We are running a slight free cash flow deficit in 2026.

But as we look forward to 2027 and beyond, you know, we begin to generate meaningful free cash flow again based on our currently sanctioned project opportunity profile. As we think about larger opportunities. And if you want to think about what might come on top of it, like, let's, let's dream for a moment around green light and that becoming a reality and multiple opportunities on top of that. I think that's where we start to, you know, like the structure that we have today, which is obviously a partner and we have that in other parts of our business.

We like, we like the opportunities within our business and honestly, you know, look at various financing opportunities, which will enable us. But, you know, when you do the really simple math around deploying a billion and a half dollars historical return multiples that that Pemina has done, you know, you can, you can pretty clearly get to a mid single digit rose number for Pemina, you know, into a very long term. And so we like that we have that investment capacity and not only just the financial capacity. I think we have the execution capacity. Clearly, we have a really solid track record of executing projects on time on budget. And we're applying that to projects in our core business as well as some of these ones, which are, you know, on the face of it new for us maybe but realistically very similar to what we've done in the past in many other ways and taking a similar strategy.

So we're managing the risk from that perspective.

I'll chime in and Chris feel free to add anything. But I think to ask that question, I mean, we are obviously in control of our project and the negotiations with our with our customer. But we don't control our customers ultimate decision to FID their innovation center. So there's two pieces to this to the puzzle. And I think that's potentially what you're getting at. So there's obviously our our piece and then there's the innovation center piece. And that's, you know, that's not obviously within our control.

That's just that's just the legacy of that that pipeline. That's how that pipeline has been underpinned for. You know, 10 years as soon as we since we put it into service. So that's just been the initial contracting and that's how that that pipeline structured.

Yeah, I think on your on your first question, you know, our understanding from media reports is that it's simply a financing to help fund phase two. So, you know, that's not something that we're currently participating in. You know, we don't want to be a passive investor in something. So, nothing to see from a Pemma perspective on on the rumors of a of a sell down.

And then on the second part of the question. I mean, we have positioned, you know, cedar to potentially take incremental gas, whether it's the cedar link pipeline. Or a few of the other few of the other onshore facilities. And so we would love to do a cedar to, but as you pointed out, it's, it's solely dependent on on gas supply. And what I would say is right now, our partners at LNG Canada, I think are pretty focused on getting phase one up and running and engineering phase two. So I think until they're through some of those decisions, we won't we won't have a line of sight to that. But we stand ready, willing, and able if if that's a possibility.

Hey, it's it's Chris. Well, you know, here's what I'd say. I'd say we definitely see the potential for significant growth in the gas to power space in particular to power data centers. We think that the Alberta market in Alberta is ripe for for growth in that space and we think we're really well. Well positioned with our current project with with our partners.

And so, you know, for us it is it is one of the growth pathways that were. You know, personally, frankly, it's the opportunity opportunity to grow into. We're not looking to grow into the merchant power space. That's not a that's not a space we're going to go to.

And so, you know, we're going to be able to do that. We're going to be able to do that.